Joint home loans in India: Pros and cons for couples to boost eligibility and save tax

Joint home loans are increasingly becoming popular in India, especially among young couples and nuclear families looking to construct or purchase a new house.

A joint home loan is a financial arrangement in which multiple individuals share the responsibility of loan repayment.

This kind of arrangement has several advantages and disadvantages. 

This write-up discusses the key pros and cons of taking a joint home loan.

What are the advantages of joint home loans?

• Enhanced loan eligibility: Combining incomes with another applicant can boost the total loan eligibility amount, allowing borrowers to afford more expensive properties.
• Shared repayment responsibility: The overall financial burden gets equally divided among co-applicants, reducing individual stress and ensuring timely repayments.
• Improved chances of loan approval: Joint applications generally have higher approval rates due to multiple income sources, individual credit scores, and stronger repayment capacities.
• Tax benefits: Co-applicants can individually claim tax benefits, i.e., deductions under Sections 80C and 24(b) of the Income Tax Act, maximising overall tax savings. 
• Lower interest rates for women co-borrowers: Many banks offer concessional interest rates if a woman is the ‘primary applicant’ or the first co-applicant. 

What are the disadvantages of joint home loans?

• Shared liability: Both borrowers are equally liable for repaying the loan. If one party defaults, the other must cover the entire EMI, posing a financial risk.
• Impact on credit scores: Missed or delayed payments affect the credit scores of all co-borrowers, compromising their future borrowing capacity.
• Reduced borrowing flexibility: Until the joint home loan is repaid, both co-borrowers may face restrictions on individual borrowings for other needs such as education, health, sudden unplanned emergencies, etc.
• Financial management challenges: Home loans have long repayment tenures. Unexpected situations such as job losses, global recessions or sector-specific slowdowns can strain finances.
• Risk of disputes or legal complications: Joint home loans can lead to misunderstandings or legal disputes, especially in cases of separation or disagreements over repayment.

What are some key considerations before applying?

Couples should fully understand the loan agreement, terms, and conditions before opting for a joint home loan. It is also important to discuss the legal ramifications of not paying the loan with a certified financial planner even before applying for a joint home loan.

Proper legal documentation, such as co-ownership agreements, EMI share distribution, bank details, etc, is essential to clarify ownership and borrowing shares in case of problems later on.

What are the current home loan rates?

​As of April 9, 2025, HDFC Bank offers home loan interest rates beginning from 8.70% per annum, while State Bank of India (SBI) provides home loan interest rates starting from 8.25% per annum.

Note: The home loan interest rates discussed above are illustrative in nature only. For the exact and updated home loan rates, related​ terms and conditions consider reaching out to the official website of your respective lender and their designated customer service team.

Conclusion

Therefore, joint home loans offer immense advantages but, due to the associated drawbacks, require careful consideration and professional guidance.

Hence, by understanding these crucial aspects, couples can make an informed decision appropriate for their financial goals and current circumstances.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial or legal advice. Readers are advised to consult with a qualified financial advisor or legal expert before making any home loan decisions.